NIBCO’s Sap Implementation
Three years prior to the Go-Live date, NIBCO was engaged in a strategic planning reshuffle. At the same time, the company was also looking to reengineer its supply chain framework to increase the satisfaction and utility for the customers. Through these efforts, the company realized that it would not succeed with its current legacy information systems. The last time that the company had updated their information systems was five years prior to the restructuring effort. Now these systems had become inefficient, and unreliable, and they could not communicate with one another.
The company lacked the necessary information processes that could propel it higher in the market in terms of market share and revenues. To become successful at global expansion, the company needed to have an integrated information system. The Boston Consulting Group conducted an investigation into the legacy systems and discovered that their functionality and data remained suspect owing to the multiple access points and databases. The recommendation from the BCG was that it should do away with the legacy system and incorporate integrated systems that would be implemented gradually within a three to five year period.
The company opted to implement the ERP system immediately rather than use a phased or ‘go slow’ approach to the implementation. The team settled on the ‘big bang’ approach because they sensed that with a phased implementation, they might not fully execute the plan. In addition, research on some of the companies that had used phased implementation indicated that their success rate was low. The company’s business endeavors also demanded a quicker implementation if they were to be initiated in the near future. Furthermore, the consultation fees were lower with immediate implementation than with the phased method.
Despite the advantages of the immediate implementation of an ERP system in the company, there were still a myriad of risks associated with the plan. For instance, the company ran the risk of the integration not working with some parts of the organization not feeling the effects of the new system. Immediate implementation could also lead to some departments being worse off than they were before the project was implemented. Complete focus on the integration goals would also mean that there would be some ‘sacrificial lambs’ along the way, and there was no way of determining how such loss would impact the company’s bottom line.
In addition, many company initiatives would have to be put on hold as the entity focused all of its efforts on ensuring the successful implementation of the new project. Large-scale personnel changes and an exponential increase in the demand for training would also hamper the successful deployment of the ERP system. Customer satisfaction would also have to be maintained throughout the entire process. The company had to literally pull off a balancing act to ensure staff and customer retention were not compromised in the entirety of the project implementation.
All the above factors culminated into a time constraint. If the project was not completed within the given time frame, then the business ran the risk of collapsing completely. Thus, the company had to ensure the project was completed on time and that the result would be of high quality, beneficial to the clients, the staff members, and the organization as a whole. 1
The project was divided into four large phases that included preparation, analysis, design, and implementation. Due to insufficient resources, the team had to build several tools to help with encryption, scripting, and project management. The business responsibilities of the project were delegated to the finance and controlling team, the production planning team, and the sales/distribution team. Different teams were also set up to take care of the technical responsibilities of the project as well as the change management process.